Abby is a shareholder in the A Corp. Abby's basis in her stock is $1,000. She receives an $850 distribution of cash at the end of 2021. At the time of the distribution, A Corp has an E&P of $100 (including current and accumulated). 

a. What is the amount of dividend out of the distribution of $850? 

b. What is Abby’s basis in her stock after the distribution? 

c. Same facts except that Abby received a $1,100 distribution of cash. 

How’s the $1,100 distribution treated and taxed for tax purposes?

Answer rating: 100% (QA)

a the number of the dividend out of the distribution of 850 is 100 b Abbys basis in her stock once the distribution is 900 c The 1100 distribution is ... View the full answer